Premarket: Apple is red

From TheStreet’s “Dow Futures Slip Lower Ahead of Bank Earnings, December Retail Sales: Biden Proposes $1.9 Trillion COVID Aid Boost” posted early Friday:

U.S. equity futures slipped lower Friday, while the dollar held pace for its best week since November, as investors picked through details of President Elect Joe Biden’s stimulus proposals while preparing for the unofficial start to the fourth quarter earnings season.

Biden will ask Congress to approve around $1.9 trillion in new spending as part of an “American Rescue Plan” that will focus on the country’s COVID response and direct household relief payments. The plans, unveiled in a speech last night, include topping up direct payments to households by $1,400, boosting unemployment benefits and raising the minimum wage to $15 per hour.

The plan’s costs were largely in-line with expectations, and were paired with comments from Federal Reserve Chairman Jerome Powell on rate hikes and bond purchases that soothed any concerns of near-term changes to the current ‘accommodative’ stance. That kept bond markets in check in overnight trading and boosted the U.S. dollar, but had little impact on stocks, which remain range-bound heading into today’s key earnings releases bond from banking sector.

The updates will kick-off a fourth quarter reporting season that is expected to show a 9.8% decline in collective S&P 500 earnings, to around $310.8 billion, before rebounding with a 16.4% gain over the first three months of the year.

My take: More sideways trading ahead.

2 Comments

  1. TSMC announced it will spend $28B increasing its capacity to make chips (WSJ, Reuters et al). Must have a large order on their books to commit that sum. It takes years to build out capacity or at least it used to. We all know most vendors are not to reveal customer #1!

    1
    January 15, 2021
    • Mark Visnic said:
      Speculation is the big upside surprise in cap ex goes beyond known customers to … Intel.

      0
      January 15, 2021

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